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Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of
Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.80 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.20 per unit. Waterways currently sells 488,000 sprinkler units at an average selling price of $26.00. The manufacturing costs are $6,270,990 variable and $2,315,866 fixed. Selling and administrative costs are $2,610,610 variable and $810,160 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round answers to O decimal places, e.g. 5% or 2,520.) Contribution margin ratio Profit by by SA $ %
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